TIOL-DDT 317 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399" size="3">TIOL-DDT
317</font><br>
07 03 2006<br>
Tuesday</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>'Private
personal property' Government amends a 35 year old notification</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lost among the
budget notifications was a very important notification, which the Board as
usual was not very keen on making public. This was not a part of the budget
notifications and was so not circulated. Why this was not a part of the budget
notifications is another mystery. Any way this notification No. 21/2006 is
dated 1.3.2006 and brings in several important amendments to various notifications.
We bring you the details.<br>
<br>
As per notification No. 80/70-Customs, dated the 29th August 1970, articles
imported for replacement of defective parts of imported articles are exempted
from customs duty. However, as usual there is a string attached. “The
defective articles must have been brought into India earlier from places outside
India and are <b>private personal properties</b> of the importer.” What
does <b>private personal </b>mean? Is this applicable only to individuals?
The issue came up before the Tribunal nearly 20 years ago. In Quality Steel
Tubes (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2002/2002-TIOL-188-CESTAT-DEL-SB.htm"><strong>2002-TIOL-188-CESTAT-DEL-SB</strong></a>),
the Tribunal held that the exemption would be <b>applicable only to importers
being individuals, because of usage of the term ‘private personal property’
of the importer.</b> But the Bombay High Court in the Echjay Industries case
took a different view and the Tribunal in Kesoram Industries (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2002/2002-TIOL-189-CESTAT-KOL.htm"><strong>2002-TIOL-189-CESTAT-KOL</strong></a>).held
that the benefit would be allowed to companies as well. The litigation continued
merrily and finally Board realized that there was an issue and by that omnibus
Customs circular No. 1/2005 dated 11..1.2005 clarified that the exemption
<b>should not be extended to import of warranty replacements by companies
or commercial organizations.</b> Incidentally the CBEC web site does not recognize
this circular, for you don’t find it in their web site. And the Revenue
Secretary is very keen that nobody should publish a notification or circular
before the CBEC web site publishes it. If his wishes are to be followed that
circular simply does not exist.<br>
<br>
Now after more than a year of that undisclosed circular, Board seems to have
realized that law cannot be changed through circulars – this country
unfortunately has courts too which are not overawed by the might of the Board!
So now they have amended the notification No. 80/70 to clearly stipulate,
“the defective articles were brought into India earlier from places
outside India by an importer <b>who is an individual</b> and the defective
articles are his private personal properties; Shouldn’t they have done
this in 2005 when they issued the circular? In may 2005, we had carried an
incisive article on the subject by Joseph Prabhakar - <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1891">Import
of good as free replacement : Battle continues to be being fought on 'private
personal property'.</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Goods
imported for demo – AC can extend time</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification
No. 157/90-Customs, dated the 28th March 1990, goods imported for demonstration,
exhibition etc are exempted subject to a condition that they are re exported
within six months. This period can be extended by the Central Government for
another six months. Now this notification is amended to give this power of
extension to the AC/Deputy Commissioner.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>Pontoons – exemption withdrawn – not exactly</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> But what on
earth is a pontoon? It is actually not on earth, but in the sea. In the case
of <i>Collector of Central Excise v. Mangla Engg. Works</i>, the Tribunal
defined Pontoons as<br>
<br>
“Pontoon is not for venturing out into the sea in. It does not sail
the ocean and its uses as a carrier is limited to lightering or as a ferry
boat. Often it is no more than a barge, a flat bottomed boat, a lighter or
even as a support for a temporary bridge over a river. Whatever it is used
for it is not an ocean going vessel.”<br>
<br>
The famous elusive Circular No. 1/2005 had classified pontoons under
heading 8905. These pontoons were exempted under Notification No. 153/94-Customs,
dated the 13th July, 1994 subject to the condition that they have been imported
.along with ships .carrying imported goods, for the more speedy .unloading
of imported goods and loading of export goods and they are re-exported within
six months of the date of importation. Now this exemption is withdrawn. Does
it mean that pontoons will suddenly attract customs duty? Not exactly! They
are now unconditionally exempted under Notification No. 21/2002 which is amended. <br>
<br>
All the above changes are contained in the <b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_021.htm">NOTIFICATION
No. 21/2006-Customs</a> </b> dated 1.3.2006. It took four hours for DDT to
understand this notification. How much time the poor Babus must have spent
in piecing this together!</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>A
circular to re number another circular – Board’s numbering system
back in action</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> We had pointed
out that Circular No 824 – Central Excise was repeated, that is same
number given to two circulars. Board has reacted and Circular No. 824(2) is
now to be re numbered as 825. Board has issued Circular No. 826 to clarify
this position. Yesterday DDT had pointed out that Customs Circular No. 12/2006
was also repeated. We will bring you the corrigendum soon.<br>
<br>
<strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular826.htm">CIRCULAR
NO. 826/3/2006-CX., Dated: February 22, 2006</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>Chinkara vs Jessica</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Advocate Padmini
from Bangalore sent us this piece.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are any
number of organisations in our country known for protecting wild animals
and birds and when someone goes on a hunting spree and kills animals,
these organisations actively involve and help the government /investigating
agencies to nab the killer and punish them. That is how our handsome
Salman Khan has been recently convicted for killing chinkaras in Rajasthan
in 1998. Of course wildlife needs to be protected as they are part of our
environment.<br>
<br>
<b>But what about human life? Is it any less important than animals! </b>The
killers rather murderers of Jessica Lal are acquitted <b>for lack of evidence
when she was shot dead in front of hundreds of people who witnessed
the killing amidst a party in a bar run by a socialite without a licence?</b>
Many of them were supposed to be her best friends and why did they do this?
It means they were not genuine friends or for that matter there was not a
single good and courageous soul in the party who could come to the witness
box when they were eye witness to the murder. Will their conscience permit
them to live in peace?<br>
<br>
When life of animals are becoming more and more precious by day with
so many people/organisations to protect them, why then there is no one,
not even a friend coming forward when a human life is lost.
Where are we heading to?<br>
Let us hope and pray Jessica’s family get some solace/justice at the
higher court.</font></p>
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<TD><IMG height=67 hspace=5 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle vspace=5><B><I> Mens
Rea - a guilty mind</I></B></TD>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A fundamental
principle of <b>criminal law</b> is that a crime consists of both a mental
and a physical element. Mens rea, a person's awareness of the fact that his
or her conduct is criminal, is the mental element, and actus reus, the act
itself, is the physical element.<br>
<br>
From Supreme Court judgements:<br>
<br>
++ Penalty, a civil obligation and a coercive remedy for loss of revenue -
In contradistinction, criminal sentence not imposable unless element of mens
rea established<br>
<br>
++ If statute forbids an act, doing it itself supplies mens rea and it is
for the suspect to bring himself within statutory defences, if any<br>
<br>
++ A person who knowingly purchases smuggled goods from an importer cannot
have an intention to evade a prohibition against import, for the prohibited
goods have already been imported.<br>
<br>
++ Mens Rea is an essential ingredient of a criminal offence.<br>
<br>
<font color="#663399"><b>Man will occasionally stumble over the truth, but
most of the time he will pick himself up and continue on. -Winston Churchill<br>
</b></font><br>
<font color="#FF6666"><b>Until tomorrow with more DDT and the budget<br>
<br>
Have a nice day.<br>
<br>
Mail your comments to</b></font> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font>
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